How Debt Ceiling Default May Affect Americans

Original Published: 10/11/2013 If lawmakers don't raise the federal debt limit by October 17, the country will default on its debt for the first time ever.
Economists warn such a move could lead us into another recession.
Tom Foreman has a look at how it could affect your bottom line.
The recession started in the housing market, and neighborhoods around the country is where a default could be felt if, in fact, one comes to pass.
I say if, because it's not at all a certain thing.
But if it did pass, why would that be?
Because one of the outgrowths of this would probably be higher interest rates.
Higher interest rates mean fewer people could afford to buy homes.
That means your home value, which was rising, could start falling again because fewer people want to buy it.
Not to say anything about what it would do to the 2-million or so people who work in construction.
And, it's not just homes.
If you want to buy a new car or open a business, interest rates on that could also play a role.
Concern number two, basic payments from the government.
Let's say you or somebody in your family gets a Social Security check, or some kind of student aid, or food stamps, anything like that.
About 148-million Americans do just that and those people very often rely on that money.
That's about half the country.
Of that gets cut off, what do you do?
Let's say your father counts on veteran's benefits and now he's not getting them anymore.
What does he do about that?
Third concern, very basic one here, your job.
In the last recession, about 8-million jobs were lost in this country and those have only started coming back.
We're not totally back with those yet.
That's an area that's of big concern even without a new recession.
If a new one comes on, look out.
Heaven knows what might happen to people out there.
And beyond that, there is the question of the future.
What do you do if you have been saving money for your kids or for your golden years, for retirement?
What do you do with those savings?
They're in 401-K's, they're in mutual funds, they're in other stocks.
In the environment we just described, all of those could lose a tremendous amount of value.
That's why the default may not be just about D.C., it could be about you.

MORE RECENT NEWS

Richland County sheriff's
deputies are looking for the
man who robbed Dollar General,
905 E.Main St. in Crestline
late Monday night.
Full Story

This harsh winter will come to
an end soon, and all this snow
will start melting away.Full Story

Rev. James Cosby, founder of
the Cosby Educational Heritage
Center in Mansfield has died.
Full Story

A man was killed and two women
are injured in an auto-
pedestrian accident at 8:30
Monday morning on West Fourth
Street at Western Avenue in
Mansfield.Full Story